Asian Markets Slump Amid China Economy Fears

Chinese stocks have fallen again amid uncertainty that cuts to interest rates would stabilise the country's faltering economy.

Key share indexes rallied on opening but were then hit by waves of selling with investors worried that more support was needed from the Government and the central bank.

Following a near 20% plunge in stock prices in three days, the People's Bank of China (HKSE: 3988-OL.HK - news) cut interest rates late on Tuesday.

It (Other OTC: ITGL - news) also lowered the amount of reserves that banks must hold in a move that some economists said was long overdue.

However by mid morning China's CSI300 index was down 0.5% while the Shanghai Composite Index was down 1.3%.

Japan's Nikkei was the lone bright spot, rising 1.3%, while Australia fell 0.4%.

Tuesday's rate cut helped the FTSE 100 index of Britain's leading shares claw back many of the big losses it sustained on so-called "Black Monday".

The Footsie ended Tuesday up 182 points (3.09%) at 6081 as £46.7bn was added to the value of the index after it lost around £74bn (4.7% or 289 points) a day earlier in its biggest daily drop since 2009.

There were also increases in European markets, with Germany's DAX and France's CAC both up more than 4% at the close, as some commentators dubbed it 'Turnaround Tuesday'.

But America's Dow Jones ended down more than 200 points (over 1%), wiping out gains of around 2% earlier in the session after it suffered big losses the previous day.